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GOOGLE, YAHOO FACE CRITICISM OVER CENSORSHIP IN CHINA

Google and Yahoo were among technology companies criticized by American lawmakers for agreeing to help Chinese authorities by censoring Internet searches and handing over private data.

“Your abhorrent activities in China are a disgrace,” California Representative Tom Lantos, the ranking Democrat on the House Committee on International Relations, said yesterday at a joint subcommittee hearing. “I simply do not understand how your corporate leadership sleeps at night.”

Decisions by American companies to help Chinese authorities sparked concern among lawmakers, prompting hearings yesterday in Washington. Executives from Google, Yahoo and Microsoft, owners of the top three Internet search sites, and Cisco Systems, the largest maker of routers to direct Internet traffic, said the cooperation with China enabled the Internet to flourish, mostly advancing the flow of information to the Chinese people.

“On balance, it’s better for Microsoft and other Internet companies to be engaged in China,” Microsoft Associate General Counsel Jack Krumholtz told lawmakers yesterday. “The benefits far outweigh the downside in terms of promoting freedom of information.”

– Bloomberg News

REAL ESTATE

HOMES SALES FALL 4.7%

Home sales in America fell 4.7% in the fourth quarter from a record in the previous three months, another sign the housing market is cooling, according to a report from the National Association of Realtors.

Sales of existing single-family homes and condominiums declined to an annualized pace of 6.9 million, seasonally adjusted, from 7.24 million in the third quarter, the trade group said yesterday. The median price for a single-family house rose 14 percent from a year earlier, compared with 15 percent in the third quarter, the fastest appreciation in 26 years.

The housing market is slowing from a “red hot” pace as rising mortgage rates make homes less affordable, said Richard Yamarone, chief economist at Argus Research Corp. in New York. Home sales probably will settle to the third-best year on record after posting all-time highs every year since 1999, he said.

“So we don’t get the gold medal in housing this year – we have to settle for the bronze,” Mr. Yamarone said. “There’s still plenty of demand for housing in the U.S., even with the higher mortgage rates.”

The average rate for a 30-year fixed mortgage probably will increase to 6.6% this year, the highest since 2001, NAR said on February 7. Existing home sales likely will fall to 6.74 million in 2006 from 7.07 million last year, the group said.

– Bloomberg News

IN THE COURTS

KERKORIAN LAWYER IS INDICTED IN HOLLYWOOD WIRETAP PROBE

A lawyer for investor Kirk Kerkorian was indicted as part of a Hollywood wiretapping probe on charges he hired a private investigator to record the phone calls of the billionaire’s ex-wife during a dispute over child support.

Terry Christensen, 65, is charged with paying Anthony Pellicano at least $100,000 for a wiretap that would “secure a tactical advantage in litigation,” the U.S. attorney’s office in Los Angeles said yesterday. Christensen is a former president of Tracinda Corp., the investment vehicle through which Kerkorian owns a 9.9% stake in General Motors Corp.

Mr. Pellicano, 61, was indicted last week for wiretapping actors, including Keith Carradine and Sylvester Stallone, as well movie producers and entertainment industry journalists.

“We are shocked that the U.S. attorney’s office has chosen to take this action against someone who has only engaged in lawful conduct throughout his distinguished 35-year career,” said Patricia Glaser, a lawyer with Mr. Christensen’s firm, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, in a statement. “Mr. Christensen has never hired anyone to conduct wiretapping or any other illegal activity.”

– Bloomberg News

SKILLING SAID THAT EXECUTIVES APPROVED OFF-BOOK PARTNERSHIPS

Former Enron Corp. Chief Executive Officer Jeffrey Skilling said as early as 1999 that lawyers and accountants approved the off-books partnerships that were partially blamed for the company’s collapse, a witness testified.

The testimony by Kenneth Rice, who ran Enron’s broadband unit for two years, bolsters Mr. Skilling’s and Chairman Kenneth Lay’s arguments that Enron’s board, accountants, and lawyers sanctioned the partnerships. Mr. Rice said Mr. Skilling stressed the entities would cut Enron’s investment-banking fees when executives challenged their use.

“You said, even if the board and the lawyers approved it, you didn’t like it?” Mark Holscher, one of Mr. Skilling’s defense lawyers, asked Mr. Rice on cross examination in federal court in Houston yesterday. “I didn’t like the way it looked,” the witness replied.

– Bloomberg News